UBS raises its forecast for Macau's gaming revenue growth in the second half of the year to 12% and upgrades Wynn's rating to "Buy."

UBS research report indicates that the forecast for Macau's total gaming revenue (GGR) growth in the second half of 2025 has been raised from 7% to 12%, compared to a year-on-year growth of 4% in the first half of this year. The bank believes that the gaming market landscape in Macau is changing, with hotel room growth no longer being the main driver of market share growth. Key factors have shifted to the distribution of gaming tables, high-end products, and services, and it is expected that mid-to-low-end mass market operations will continue to face challenges from domestic tourism competition and the macroeconomic environment in China.

As the gaming market continues to upscale, the bank expects high-end gaming companies such as Wynn Macau (01128.HK) and MGM China (02282.HK) to maintain or expand their market share, and the valuation discount compared to large gaming companies will narrow. The bank estimates that Wynn Macau's mass market share in the third quarter of this year will reach 12.2% (an increase of 0.5 percentage points from the original forecast), while MGM China's mass market share is estimated to reach 16.4% (an increase of 0.7 percentage points from the original forecast). The bank expects Sands China (01928.HK) and Galaxy Entertainment (00027.HK) to have mass market shares of 24.5% (a decrease of 0.2 percentage points from the original forecast) and 19.5% (a decrease of 0.1 percentage points from the original forecast) respectively in the third quarter.

The bank has upgraded Wynn Macau's rating from "Neutral" to "Buy," raising the target price from HKD 6.1 to HKD 8.4, which corresponds to a projected enterprise value to EBITDA of 9.5 times next year; it maintains a "Buy" rating on MGM China, raising the target price from HKD 15.9 to HKD 19.8, which corresponds to a projected enterprise value to EBITDA of 9.5 times next year.

UBS maintains a "Neutral" rating on Sands China, raising the target price from HKD 17.8 to HKD 21.6, which corresponds to a projected enterprise value to EBITDA of 11.5 times next year; it maintains a "Buy" rating on Galaxy Entertainment, raising the target price from HKD 43.9 to HKD 46.9, which corresponds to a projected enterprise value to EBITDA of 11.7 times next year